Newburgh council votes to issue 2 bonds to avoid fiscal disaster

Tuesday

Nov 17, 2009 at 2:00 AM

BY DOYLE MURPHY

CITY OF NEWBURGH — After a last-minute argument over who would watch the money, the City Council agreed Monday to borrow more than $33 million in hopes of avoiding financial ruin.The decision should inject $5.6 million into the city’s budget before the end of the year. The timing matters because it will allow Newburgh to count that money against a $19 million tax levy proposed for 2010, reducing the amount that would fall on taxpayers.The change would reduce a proposed tax increase to 35 percent from 83 percent for homeowners.The $5.6 million is set to come from bonds sold to finance construction overruns for Newburgh’s new courthouse and for the city’s share in cleaning up the old Consolidated Iron & Metal site on the banks of the Hudson. The bonds allow the city to put those costs on a long-term payment plan rather than pay them entirely out of pocket next year.Acting City Manager Richard Herbek has told the City Council that’s how Newburgh should pay for all its major infrastructure projects. He put together a list of 10 other such projects, totaling $27.8 million. The $27.8 million is different from the first bond because the city wouldn’t immediately need to cash in. The resolution sets up the city in the future so it doesn’t have to pay for those projects out of its general fund when the time comes. That resolution passed 4-1, with Councilwoman Mary Ann Dickinson voting against because, she said, she didn’t have enough information.Councilwoman Marge Bell refused to vote for either bond until the council also agreed to create an outline for a financial advisory board comprising city staff, elected officials and residents. Herbek had planned to talk to the council in more depth about such a board, and Councilwoman Regina Angelo argued they could deal with it at the council’s next work session.“No ma’am,” Bell said. “We’re talking about $33 million.” The council agreed to create the board.dmurphy@th-record.com